1 July 24, 2024 QUARTERLY @2024 Stuart Bradie, President and CEO Mark Sopp, Executive VP and CFO Jamie DuBray, VP of Investor Relations FORWARD-LOOKING STATEMENT The statements in this presentation that are not historical statements, including statements regarding our expectations for our future financial performance, effective tax rate, operating cash flows, contract revenues, award activity and backlog, program activity, our business strategy, interest expense, our plans for raising and deploying capital ...

Part I [Executive Summary and Strategic Highlights](index=1&type=section&id=Executive%20Summary%20and%20Strategic%20Highlights) KBR reported strong Q2 2024 results, raising guidance and strategically acquiring LinQuest for enhanced capabilities - CEO Stuart Bradie highlighted **strong performance** across key metrics, leading to an **increase in full-year profit and cash flow guidance**[3](index=3&type=chunk) - The planned acquisition of LinQuest is a strategic move to enhance KBR's **high-end technology, expertise, and mission capabilities**, strengthening support for U.S. defense and intelligence agencies[3](index=3&type=chunk) [New Business Awards and Backlog](index=1&type=section&id=New%20Business%20Awards%20and%20Backlog) KBR's backlog and options reached **$20.1 billion** with a **1.0x TTM book-to-bill ratio** and **$2.1 billion in quarterly bookings** | Metric | Value | | :--- | :--- | | Total Backlog and Options (as of June 28, 2024) | $20.1 billion | | TTM Book-to-Bill (Total) | 1.0x | | TTM Book-to-Bill (Government Solutions) | 1.2x | | TTM Book-to-Bill (Sustainable Technology Solutions) | 0.8x | | Quarterly Bookings and Options | $2.1 billion | - Key awards for Sustainable Technology Solutions (STS) include **K-GreeN® green ammonia technology** selection in India, an **operator training simulator contract** for OCI Global, a **five-year advisory contract for Iraq**, and **phenol technology licensing** in China[4](index=4&type=chunk) - Key awards for Government Solutions (GS) include a position on the **$43 billion Medical Q Coded Support contract**, an **$82 million task order for B-52 support**, a position on the **$2 billion Global Contingency Services contract**, and a **$34 million recompete contract** for U.S. Naval Research Laboratory facility operations[8](index=8&type=chunk) [Second Quarter 2024 Financial Performance](index=2&type=section&id=Summarized%20Second%20Quarter%202024%20Financial%20Results) KBR's Q2 2024 revenue grew **6% to $1.9 billion**, with **net income of $106 million** reversing a prior-year loss, and **Adjusted EBITDA increasing 13%** | Financial Metric | Q2 2024 | Q2 2023 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $1,855M | $1,753M | +6% | | Net Income (loss) attributable to KBR | $106M | ($351M) | N/A | | Adjusted EBITDA | $216M | $191M | +13% | | Adjusted EBITDA Margin | 11.6% | 10.9% | +75 bps | | Diluted EPS | $0.79 | ($2.60) | N/A | | Adjusted EPS | $0.83 | $0.74 | +12% | | Operating Cash Flows | $170M | $253M | -33% | - Revenue growth was driven by **Sustainable Technology Solutions** and **Government Solutions** (International, Defense & Intel, Science & Space), partially offset by reduced Ukraine-related activity[9](index=9&type=chunk) - The substantial increase in net income compared to Q2 2023 is primarily due to the **non-recurrence of a $132 million after-tax legal settlement charge** and a **$314 million non-cash charge related to convertible notes** from the prior year[10](index=10&type=chunk) - KBR returned **$118 million to shareholders** during the quarter, including **$97 million in share repurchases** and **$21 million in dividends**[12](index=12&type=chunk) [Year-to-Date 2024 Financial Performance](index=3&type=section&id=Financial%20Highlights%20for%20the%20Six%20Months%20Ended%20June%2028%2C%202024) KBR's YTD 2024 revenue increased **6% to $3.7 billion**, with **net income of $199 million** reversing a prior-year loss, and **Adjusted EBITDA growing 13%** | Financial Metric | YTD 2024 | YTD 2023 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $3,673M | $3,456M | +6% | | Net Income (loss) attributable to KBR | $199M | ($265M) | N/A | | Adjusted EBITDA | $423M | $373M | +13% | | Adjusted EBITDA Margin | 11.5% | 10.8% | +72 bps | | Diluted EPS | $1.47 | ($1.95) | N/A | | Adjusted EPS | $1.59 | $1.41 | +13% | | Operating Cash Flows | $261M | $288M | -9% | - Year-to-date revenue growth mirrored Q2, driven by **Sustainable Technology Solutions** and **Government Solutions**, partially offset by reduced Ukraine activity[13](index=13&type=chunk) - The significant improvement in year-to-date net income was primarily due to the **non-recurrence of a $132 million after-tax legal charge** and a **$314 million non-cash charge for convertible notes** from the first half of 2023[15](index=15&type=chunk) - Year-to-date capital returned to shareholders totaled **$197 million**, including **$158 million in share repurchases** and **$39 million in regular dividends**[17](index=17&type=chunk) [Anticipated Acquisition of LinQuest](index=4&type=section&id=Anticipated%20Acquisition%20of%20LinQuest) KBR agreed to acquire LinQuest Corporation for **$737 million net of tax benefits**, expected to close in Q3/Q4 2024 and be **accretive to Adjusted EPS** - KBR agreed to acquire LinQuest Corporation for **$737 million**, net of modest expected tax benefits[18](index=18&type=chunk) - The acquisition is expected to be **accretive to Adjusted EPS** and is planned to close in **Q3 or Q4** of the current year[18](index=18&type=chunk) - Funding for the transaction will come from a combination of **cash on hand and existing debt capacity**[18](index=18&type=chunk) [Updated Fiscal 2024 Guidance](index=4&type=section&id=Updated%20Fiscal%202024%20Guidance) KBR raised its fiscal 2024 guidance for **Adjusted EBITDA, Adjusted EPS, and operating cash flow**, with revenue unchanged and excluding LinQuest impact | Metric | Updated Fiscal 2024 Guidance | Prior Fiscal 2024 Guidance | | :--- | :--- | :--- | | Revenue | $7.4B - $7.7B | $7.4B - $7.7B | | Adjusted EBITDA | $825M - $850M | $810M - $850M | | Adjusted EPS | $3.15 - $3.30 | $3.10 - $3.30 | | Operating cash flows | $460M - $480M | $450M - $480M | - The updated guidance reflects **increased confidence in profitability and cash generation** for the remainder of the year[19](index=19&type=chunk) - This guidance is based on a diluted and adjusted share count of approximately **135 million shares**[20](index=20&type=chunk) [Financial Statements](index=7&type=section&id=Financial%20Statements) This section presents detailed consolidated financial statements, including statements of operations, balance sheets, cash flows, and backlog information [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For H1 2024, KBR reported **$3.67 billion in revenues** and **$199 million net income**, reversing a prior-year loss due to non-recurring charges | Revenue by Segment (Six Months Ended) | 2024 | 2023 | | :--- | :--- | :--- | | Government Solutions | $2,783M | $2,680M | | Sustainable Technology Solutions | $890M | $776M | | **Total revenues** | **$3,673M** | **$3,456M** | - The significant swing from a net loss in 2023 to net income in 2024 was primarily driven by the **non-recurrence of a $314 million charge for Convertible Notes** and a **$144 million legal settlement charge** from the prior year[29](index=29&type=chunk) [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 28, 2024, KBR's **total assets were $5.76 billion**, with **cash increasing to $414 million**, and **total liabilities rising to $4.35 billion** | Balance Sheet Item (in millions) | June 28, 2024 | Dec 29, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $414 | $304 | | Total current assets | $1,825 | $1,651 | | Total assets | $5,764 | $5,565 | | Long-term debt | $1,900 | $1,801 | | Total liabilities | $4,353 | $4,171 | | Total KBR shareholders' equity | $1,402 | $1,383 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For H1 2024, KBR generated **$261 million in operating cash flow**, used **$158 million in financing activities**, and ended with **cash and cash equivalents of $414 million** | Cash Flow Item (Six Months Ended, in millions) | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $261 | $288 | | Net cash provided by (used in) investing activities | $8 | ($21) | | Net cash used in financing activities | ($158) | ($126) | | **Increase in cash and cash equivalents** | **$110** | **$150** | - Major uses of cash in financing activities for the first six months of 2024 included **$158 million for common stock repurchases** and **$39 million for dividend payments**[33](index=33&type=chunk) [Backlog Information](index=11&type=section&id=Backlog%20Information) As of June 28, 2024, KBR's **total backlog and options were $20.1 billion**, a **7% decrease from 2023**, with **GS at $16.2 billion** and **STS at $3.9 billion** | Backlog (in millions) | June 28, 2024 | Dec 29, 2023 | | :--- | :--- | :--- | | Government Solutions Backlog | $12,894 | $12,790 | | Sustainable Technology Solutions Backlog | $3,923 | $4,545 | | **Total backlog** | **$16,817** | **$17,335** | | Award options | $3,332 | $4,397 | | **Total backlog and options** | **$20,149** | **$21,732** | [Non-GAAP Financial Measures Reconciliation](index=12&type=section&id=Non-GAAP%20Financial%20Information) KBR uses non-GAAP measures like **Adjusted EBITDA and Adjusted EPS** to show core operational performance, excluding specific items, with detailed reconciliations provided - KBR presents non-GAAP measures like **Adjusted EBITDA and Adjusted EPS** to show core performance, excluding certain items[37](index=37&type=chunk)[38](index=38&type=chunk)[41](index=41&type=chunk) | Reconciliation of Net Income to Adjusted EBITDA (Q2, in millions) | 2024 | 2023 | | :--- | :--- | :--- | | Net income (loss) attributable to KBR | $106 | ($351) | | EBITDA | $215 | ($143) | | Adjustments (e.g., legal fees, acquisition costs) | $1 | $334 | | **Adjusted EBITDA** | **$216** | **$191** | | Reconciliation of Diluted EPS to Adjusted EPS (Q2) | 2024 | 2023 | | :--- | :--- | :--- | | Diluted EPS | $0.79 | ($2.60) | | Adjustments (e.g., amortization, legal fees, convert charges) | $0.04 | $3.34 | | **Adjusted EPS** | **$0.83** | **$0.74** |

KBR, Inc. (KBR) is slated to report its second-quarter 2024 results on Jul 24, 2024, before market open.In the last reported quarter, its adjusted earnings and revenues beat the Zacks Consensus Estimate by 10% and 1.1%, respectively. Also, on a year-over-year basis, the top and bottom lines grew 7% and 15%, respectively.The company’s earnings surpassed the consensus estimate in each of the trailing four quarters, the average surprise being 5%.Trend in Estimate RevisionThe Zacks Consensus Estimate for second ...

HOUSTON, July 22, 2024 /PRNewswire/ -- KBR (NYSE: KBR) announced today its blue ammonia technology has been selected by Shell for its Blue Horizons low-carbon hydrogen and ammonia project in Duqm, Oman. The facility will utilize KBR's leading ammonia synthesis loop technology to deliver cost-competitive and low-carbon intensity ammonia.Under the terms of the contract, KBR will provide licensed proprietary engineering design for the 3,000 metric tons per day ammonia plant utilizing hydrogen produced by Shell ...

KBR, Inc. (KBR) secured a consulting contract from Kuwait Oil Company to develop a master plan for 17GW of renewable energy and 25GW of green hydrogen production by 2050.Per the contract, the company will provide advisory consulting services to develop a phased strategy for deploying wind and solar power with storage capability. This renewable power will support green hydrogen production for internal use and export. The work will span 18 months and include market analysis, feasibility studies and training f ...

In a bid to expand opportunities for revenue growth and meet customer and market demands, KBR, Inc. (KBR) recently inked a deal to acquire an engineering, data analytics and digital integration company — LinQuest Corporation.The acquisition is expected to be accretive to adjusted earnings per share (EPS) (excluding amortization from purchased intangible assets and non-recurring transaction costs) and is unanimously approved by the KBR board of directors. The deal is worth $737 million, inclusive of modest e ...

HOUSTON, July 18, 2024 /PRNewswire/ -- KBR (NYSE: KBR) announced today it has been awarded an advisory consulting contract by Kuwait Oil Company for the development of a country wide masterplan for the production of 17GW of renewables and 25GW of green hydrogen by 2050. Under the terms of the contract, KBR will provide advisory consulting services to develop a phased strategy for the deployment of significant wind and solar power, combined with power storage capability. The renewable power capability will b ...

Wall Street expects a year-over-year increase in earnings on higher revenues when KBR Inc. (KBR) reports results for the quarter ended June 2024. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.The earnings report, which is expected to be released on July 24, 2024, might help the stock move higher if these key numbers are better than expectation ...

Have you been searching for a stock that might be well-positioned to maintain its earnings-beat streak in its upcoming report? It is worth considering KBR Inc. (KBR) , which belongs to the Zacks Engineering - R and D Services industry.When looking at the last two reports, this the engineering, construction company has recorded a strong streak of surpassing earnings estimates. The company has topped estimates by 5.74%, on average, in the last two quarters.For the last reported quarter, KBR came out with earn ...

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